Roncucci&Partners, together with Confindustria Romagna, organized and moderated the webinar “Make in India, Opportunities and Challenges for Italian Companies,” which was attended by Italian Ambassador to India Vincenzo De Luca, Claudio Maffioletti, CEO and Secretary General of the Italian-Indian Chamber of Commerce, Vita Zinna and Ravi Garyali, Project Managers of Roncucci&Partners India. The event was moderated by Giovanni Roncucci, Chairman of Roncucci&Partners, and Federico Rubini, Project Manager.
Ambassador De Luca opened the webinar by outlining the growing opportunities in India that are opening up in light of the new dynamics of market internationalization, as part of the processes of redefining procurement and export markets. India, in this scenario, represents an interesting country: it is the most populous country in the world after China, and its economy is growing at a projected 8% by 2023, against a global average of 3.6%. India is running fast, as the ambassador points out, and this is nothing new: in the seven years since Modi’s election in 2014, India’s GDP has grown 40%; only China has managed to do better. India, then, is destined to have a significant weight in the world economy. Economic development over the past two decades has also led to a reduction in poverty and allowed the middle class to expand. This should be a driver for the demand of consumer goods.
India is investing heavily in sectors in which Made in Italy excels, and the country’s economic development in the coming years will depend on the goals that the “Make in India” program pursues: advanced manufacturing, energy transition, and the digital economy. Therefore, there appear to be many business opportunities to be seized in India: particularly for the mechanical and electrical machinery sector, which offers interesting prospects for Made in Italy and, in particular, in view of the possible India-EU free trade agreement, for which negotiations have resumed.
Ambassador De Luca then points out several initiatives carried out by ICE and Sace in assistance, information and promotion of Italian companies in India. One service recently launched by Sace is the “Push Strategy” program: Sace, through its guarantee, allows Indian buyers to have interest rates on long-term credit lines, with the aim of developing the procurement of Italian companies.
Claudio Maffioletti then intervened, saying that India is a country to be discovered and a land to be understood. For Italian companies, India is a valid outlet market, as the country is mainly interested in Italy’s manufacturing capacity. Enough to think that manufacturing and agriculture together do not reach 30% of India’s GDP: this means that the country is still strongly anchored to foreign trade. As Maffioletti points out, there is a growing interest on the part of Indian companies to set up joint ventures with Italian companies, usually of the brownfield type. These typical cross-border investments in India are not aimed at relocation, but rather due to a company’s specific interest in the Indian market.
Therefore, India represents an attractive country for Europe, but at the same time Europe is also attractive to India. More than 600 Italian companies have invested in India: the main interest from the Indian market, beyond the import of semi-finished metal and some goods, is Italian manufacturing capacity. However, you cannot think of doing business with India if you do not actually get to know it: it is another world, a world unto itself, although it is possible to intercept several elements of similarity with Italian industry. Just think that the economic fabric is mainly made up of micro, small and medium-sized enterprises, although, as Giovanni Roncucci points out, there is a strong presence of large industrial groups active in very diverse sectors, such as the Adani Group.
Despite the bureaucratic simplifications of recent years, the market remains complex, with great geographic diversity, as Vita Zinna and Ravi Garyali, Project Managers of Roncucci&Partners India, point out, and with different language barriers. In India, English is certainly widespread from North to South, but Italian companies that want to do business in underserved areas need to keep in mind that perhaps English is not the true language of entry, as people might think.
To go to India, according to Ravi Garyali, we must look at what India and Italy have in common: ethics, family values, and stable interpersonal relationships. We need to be open and able to adapt our strategy.
First of all, we need a feasibility study on whether a product can penetrate the Indian market, and then the appropriate geographical area must be identified. In addition, the approach must be long-term, and we must not stop at critical issues. Finally, companies approaching India must also prepare to offer after-sales service, which is essential for the Indian partner.
As the speakers argued, then, India is the future, so we must study it, analyze it, and have the patience to create stable and lasting relationships. Penetrating a new market means just that: analyzing it, understanding it, knowing its culture, consumer tastes and needs, economic trends, competitors, and consequently providing yourself with the best means to be appreciated and recognized. It is then necessary to process the acquired information back into a coordinated strategic plan, based on specific and mutually consistent objectives that turn into a series of concrete actions in order to achieve them.
Martina Villa and Valentina Gestri Paolucci